Jaguar Land Rover Blames 'Transformation' for Slashing 4,500 UK Jobs

Product transitions may be costly, but it may have more to do with JLR's bleeding balance sheet.

Jaguar Land Rover

Just over 10 percent of Jaguar Land Rover's 43,000-strong British workforce will soon be out of a job, reports Autocar. Britain's largest automaker claims it's part of a plan to prepare for the technological and regulatory challenges of the future, but it also comes amid slow sales of its sedans and diesel-powered vehicles along with a sharp drop in Chinese sales. 

"We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry," Jaguar Land Rover CEO Dr. Ralf Speth told Autocar

These 4,500 job cuts will come from across all of JLR's locations in the U.K., with voluntary reductions offered first in the form of a buyout program and early retirement packages. Cuts will also be focused on "the management and leadership areas of our facilities," Speth explained to Autocar. The company hopes to save £2.5 billion (nearly $3.2 billion U.S.) over the next 18 months in what Speth called a "turnaround and transformation program."

Preparing for the future is one thing, but this sounds a lot more like JLR is scrambling to make up for the recent past. The new plan to but 4,500 jobs will be in addition to 1,500 jobs that were cut across the company in 2018. The automaker's sales in China alone dropped 21.6 percent last year, which contributed to a third-quarter loss of £90 million ($114.7 million U.S.) in 2018. Jaguar and Land Rover's combined sales dropped by 4.6% last year compared to 2017's sales figures. Jaguar worldwide sales actually grew slightly by 1.2 percent from 2017, but Land Rover sales dropped by 6.9 percent. 

The future doesn't look too rosy for JLR's current direction, either, with uncertainties about Brexit looming over every U.K.-based business, along with possible hikes in American trade tariffs, the rollout of the European Union's new world harmonized light vehicle test (WLTP), and all of the ill will towards diesel cars in the wake of Dieselgate, Autocar notes. A hard Brexit could severely disrupt JLR's production and export of cars, and as long as what Brexit is actually going to look like remains in the air, companies like JLR have little choice but to prepare for the worst. 

On the subject of how badly Brexit could affect JLR, Speth refused to comment as to whether any production facilities would be closed in the cost-cutting scheme. "We have to wait for politics - what will happen after 29th March?" Speth told Autocar. Speth also made no mention on paring back the company's plan to add 13 new models. 

On the upside, the U.K. is still investing in JLR's electrification plans, which include electric drive units made in Wolverhampton starting in 2020 as well as a new battery assembly facility in Hams Hill, which no doubt saved some jobs from being cut. The company previously announced that every model it makes from 2020 on will offer either an electric or hybrid variant.